Snowflake SNOW and Broadcom AVGO are major players in the enterprise AI boom. Snowflake provides AI-powered cloud data platforms and analytics, while Broadcom supplies the AI networking, custom silicon, and infrastructure technologies that enable large-scale AI deployments across enterprises and hyperscale data centers.
Snowflake or Broadcom — Which of these Enterprise AI stocks has the greater upside potential? Let’s find out.
The Case for SNOW Stock
Snowflake is benefiting from strong adoption and growing usage of its platform, as reflected in a net revenue retention rate of 126% in the first quarter of fiscal 2027. In the same quarter, Snowflake reported 13,912 total customers and added 616 net new customers, up 38% year over year. The company now has 779 customers spending more than $1 million annually, up 29% year over year, and the number of customers spending more than $10 million annually increased to 64.
The company’s rapid adoption of its new AI products, Snowflake Intelligence and Cortex Code (CoCo), has been a key catalyst. These products are seeing the fastest uptake in company history, with CoCo already in use by more than 7,100 accounts.
Snowflake Intelligence offers business users a natural language interface to enterprise data, while CoCo empowers builders to create applications, pipelines and agents directly on the platform using natural language.
Snowflake’s partnerships with AWS, OpenAI and SAP further strengthen its position as the go-to platform for enterprise AI. The company expanded collaboration with AWS through a new $6 billion multi-year agreement, highlighted ongoing work with OpenAI, and noted that capabilities from its SAP partnership reached general availability. Snowflake also signed a definitive agreement to acquire Natoma in May 2026 to strengthen secure connections for AI agents across tools and workflows.
The Case for AVGO Stock
Broadcom is benefiting from the accelerating adoption of enterprise AI, driven by rising AI semiconductor demand, led by custom XPUs and AI networking. In second-quarter fiscal 2026, AI semiconductor revenues jumped 143% year over year to $10.8 billion, surpassing management’s expectations. Growth was driven by strong demand for custom AI accelerators (XPUs) and networking products used in large-scale computing environments. The company’s bookings for AI semiconductors exceeded $30 billion in the fiscal second quarter of 2026, far outpacing shipments.
The company’s technology leadership in both AI compute (XPUs) and networking is another major advantage. Broadcom is shipping industry-leading 100 terabit Ethernet switches and is preparing to launch next-generation 200 terabit switches. Its networking solutions, which represented almost 40% of fiscal second-quarter 2026 AI revenues, are essential for connecting and scaling AI clusters across data centers.
A key factor in AVGO’s success is its deep partnerships with leading AI platform providers, including Google, Anthropic, OpenAI and Meta. These companies rely on Broadcom’s advanced XPUs, TPUs and networking chips to power their AI workloads, which enterprises then consume via tokens and APIs. In April 2026, Broadcom entered into long-term agreements to supply multiple generations of TPUs and AI networking to Google and has secured multi-gigawatt commitments from Anthropic and OpenAI for the coming years.
Broadcom expects AI semiconductor revenues to double in the second half of 2026 and projects full-year AI semiconductor revenues of $56 billion, up approximately 180% from fiscal 2025. The company reiterates guidance for AI semiconductor revenues to exceed $100 billion in 2027, with continued growth into 2028. With record bookings and long-term customer agreements, AVGO appears well-positioned to capture further upside as enterprise AI adoption accelerates globally.
Price Performance and Valuation of SNOW and AVGO
In the trailing 12-month period, SNOW shares have gained 30.2%, underperforming Broadcom shares, which have risen 38.5%. Broadcom’s outperformance can be attributed to its rising AI revenues, driven by strong demand for custom AI accelerators (XPUs).
The underperformance of SNOW can be attributed to lower gross margins from new AI products like Cortex Code compared with Snowflake’s core platform. Integration and hiring tied to acquisitions also weigh on free cash flow margins. Stiff competition also remains a concern.
SNOW and AVGO Stock Performance
Image Source: Zacks Investment Research
Both SNOW and Broadcom shares are currently overvalued, as suggested by a Value Score of F and D, respectively.
In terms of forward 12-month Price/Sales, SNOW shares are trading at 14.19X, higher than Broadcom’s 12.18X.
SNOW and AVGO Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for SNOW & AVGO?
The Zacks Consensus Estimate for SNOW’s fiscal 2027 earnings is pegged at $1.96 per share, unchanged over the past 30 days. This indicates a 56.80% increase year over year.
Snowflake Inc. Price and Consensus
Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote
The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings is pegged at $11.73 per share, unchanged over the past 30 days. This indicates a 71.99% increase year over year.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
Conclusion
While both Snowflake and Broadcom are well-positioned to benefit from the enterprise AI boom, Broadcom stands out as the better pick thanks to its faster AI revenue growth, strong hyperscaler partnerships and greater long-term earnings visibility.
Despite SNOW’s robust portfolio, the company suffers from challenging macroeconomic uncertainties and variability of consumption as customers optimize spending on AI products that carry lower gross margins than the core platform.
Currently, Broadcom has a Zacks Rank #2 (Buy), making the stock a stronger pick than Snowflake, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).